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Oil boom brings cheap gas to the Rockies

By Mead Gruver Associated Press

Posted:
02/01/2013 10:31:11 PM MST

Updated:
02/01/2013 10:33:00 PM MST

CHEYENNE, Wyo. -- A boom in domestic oil drilling has helped lower U.S. gasoline prices, though the steepest drops have missed California commuters, Midwestern farmers and even New York commodities traders who know all about oil and gasoline pricing.

You have to be in the Rocky Mountains to see the lowest prices -- ideally in Casper, the Wyoming city of 56,000 people where gas costs $1 less than what many drivers on the East and West coasts are paying.

At $2.69 a gallon for regular, Casper had the lowest prices of any city on Friday, according to AAA.

Meanwhile, drivers in Montana, Utah, Colorado and New Mexico enjoyed gasoline prices at least 33 cents below the national average of $3.46.

The reason? Cheap Canadian tar sands oil and oil from North Dakota's booming Bakken shale are pooling in the Rockies because there isn't enough pipeline capacity to export enough of it to drive down prices elsewhere.

U.S. pipelines generally were built to carry oil from the coasts inland, not the other way, said Michael Green, an AAA gasoline price specialist.

"You have all of these supplies that are building up as well, and they're trapped in the region," Green said.

As a result, refineries in the Rockies region are scoring good deals on oil and processing it to be sold at lower prices at the pump. That doesn't do much good for, say, a Vermont maple syrup producer who might soon be looking to ship from the state with the seventh-highest gasoline prices ($3.

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66 a gallon) to Connecticut (fifth-highest, $3.79) or New York (second-highest, $3.82).

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